24th Jul 2015 08:36
LONDON (Alliance News) - Goodwin PLC Friday said its profit fell by GBP4 million in its recently completed financial year as reduced activity and increased competition hampered results but said its order book for the current year suggests its performance "will not be as bad as feared".
The mechanical and refractory engineering company reported a pretax profit of GBP20.1 million in the year ended April 30, falling from a GBP24.1 million profit a year earlier, as revenue experienced a slight fall to GBP127.0 million from GBP130.8 million.
The fall in revenue was compounded by administrative costs rising to GBP17.3 million from GBP16.5 million, partially offset by distribution costs dropping to GBP3.6 million from GBP3.8 million.
The company held its full-year dividend at 42.348 pence per share.
Goodwin said the fall in profit was mainly due to the oil and gas engineering sector as companies continue to reduce activity in the wake of lower oil prices which have fallen to around USD55 per barrel on Friday from around USD112 per barrel in July 2014.
"This lower level of available orders has also resulted in higher level of competition which has and will impact on our gross margins and pre-tax profits," said Goodwin.
Evidence of increased competition and reduced activity lies in the company's order book, which stood at GBP79 million at the end of April which is down 22% from a year earlier. However, the company said there was a surge in orders in the first two months of the current financial year which suggests its performance this year "will not be as bad as feared".
Goodwin shares were down 4.8% to 2,475.00 pence per share on Friday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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